PUBLIC POLICY
AP Gov’t UNIT IV
“Mile-a-Minute Mini Lecture”
Public Sector v.
Private Sector:
The Share of GDP* Taken by
Taxes,** Selected Countries
Sweden
49.3
Denmark
49.3
Finland
47
Norway
46.6
Belgium
45.4
France
43.6
Austria
43.5
Italy
42.4
Greece
40.5
Canada
New
Zealand
Spain
36.5
35.9
35.8
Switzerland
32
Japan
United
States
Australia
Turkey
29.4
39.4
38.5
23.1
*GDP, groos dom estic product, m easures the total annual value
of all goods and services produced w ithin a country.
**Includes national and local taxes and Social Security contributions
Chapter 17: Economic Policymaking
I. Government and the Economy pg. 542
 A. Introduction
 Capitalism / Communism / Mixed Economy
 B. Unemployment and Inflation
 Consumer price index
 C. Elections and the Economy
 Incumbents (esp. prez) held accountable for bad economy
 Voters care more about unemployment than inflation
 D. Political Parties and the Economy
 Reps more worried about inflation
 Dems more worried about unemployment
Chapter 17: Economic Policymaking
II. Policies for Controlling the Economy pg. 548
 A. Introduction
 Laissez-faire / FDR / Reagan
 B. Monetary Policy and the Fed
 Fed manipulate the supply of $$ & credit available
 Raise / lower interest rates
 Set reserve rates
 Buy / sell gov’t bonds
 C. Fiscal Policy: Keynesian versus Supply-Side Economics
 Bottom up: spend to get out of recession & worry about deficits
later
 Top down: tax breaks @ the top will “trickle down”
Chapter 17: Economic Policymaking
III. Obstacles to Controlling the Economy pg. 552
 Budgets prepared in advance
 Private sector
 Uncontrollable expenditures
IV. Arenas of Economic Policymaking pg. 556
 A. Business and Public Policy: Subsidies Amid Regulations
 B. Consumer Policy: The Rise of the Consumer Lobby
 FTC & FDA & CPSC
 C. Labor and Government
 National Labor Relations Act 1935
 Taft-Hartley Act 1947
Chapter 17: Economic Policymaking
 D. New Economy, New Policy Arenas
V. Understanding Economic Policymaking pg. 559
 A. Democracy and Economic Policymaking
 Voters have used democratic processes to avoid Marxist
revolution
 B. Economic Policymaking and the Scope of Government
Chapter 18: Social Welfare Policymaking
I. What Is Social Welfare & Why Is It So Controversial? pg. 566
 Means-tested v. Entitlement programs
II. Income, Poverty, and Public Policy pg. 568
 A. Who’s Getting What?
 Income v. wealth
 B. Who’s Poor in America?
 The poverty line
 C. What Part Does Government Play?
 Progressive v. proportional (flat) v. regressive taxes
 Earned Income Tax Credit
Chapter 18: Social Welfare Policymaking
III. The Evolution of American Social Welfare Programs pg. 574
 A. Introduction
 B. The New Deal and the Elderly
 Social Security Act of 1935
 C. President Johnson and the Great Society
 Medicare 1965
 D. President Reagan and the Limits to the Great Society
 E. President Clinton & Welfare Reform in the 1990s
 TANF
 Find work within 2 yrs.
 5 year lifetime max.
 States get Block Grant to run their own programs
IRS Tax Rates 2009: Progressive Tax
If taxable
income is
over…
But not over…
The tax is:
$0
$8,350
10%
$8,350
$33,950
15%
$33,950
$82,250
25%
$82,250
$171,550
28%
$171,550
$372,950
33%
$372,950
No limit
35%
Chapter 18: Social Welfare Policymaking
IV. The Future of Social Welfare Policy pg. 576
 A. Entitlement Programs: Living on Borrowed Time? pg. 578
 B. Means-Tested Programs: Do They Work?
 C. Social Welfare Policy Elsewhere pg. 582
V. Understanding Social Welfare Policy pg. 584
 A. Democracy and Social Welfare
 Recipients of means-tested programs aren’t politically active
 Recipients of entitlement programs are! (AARP)
 B. Social Welfare Policy and the Scope of Government
Chapter 19: Policymaking for Healthcare & the Environment
I. Health Care Policy pg. 590
 A. The Health of Americans
 Life expectancy & infant mortality rate
 B. The Cost of Health Care = 1/7 of GDP
 Expensive procedures
 Malpractice suits
 Insurance masks true costs
 Costly prescription drugs
 Aging population
Health Care Spending in Selected Democracies
Belgium
88%
Britain
84%
Denmark
84%
Sweden
84%
Percentage of Total Health
Care Spending by Government
Norway
83%
Japan
78%
New Zealand
78%
Finland
77%
Germany
76%
Spain
76%
France
74%
Netherlands
73%
Italy
70%
Switzerland
70%
Canada
70%
Australia
67%
United States
46%
0%
10%
20%
30%
40%
50%
Percentage
60%
70%
80%
90%
100%
Chapter 19: Policymaking for Healthcare & the Environment
 C. Access to Health Care
 HMO’s
 D. The Role of Government in Health Care pays about ½ the
health care bill)
 Medicare
 Medicaid
 Health Care for Vets
 E. Policymaking for Health Care
Chapter 19: Policymaking for Healthcare & the Environment
II. Environmental Policy pg. 600
 A. Economic Growth and the Environment
 B. Environmental Policies in America
 EPA
 Environmental Impact Statements
 Clean Air Act 1970 (Emissions Trading)
 Water Pollution Control Act 1972
 Endangered Species Act 1973
 C. Energy, the Environment
 D. Toxic Wastes & the Superfund
 Yucca Mtn.??
Chapter 19: Policymaking for Healthcare & the Environment
E. Making Environmental Policy
 Concern over Climate Change
 The Kyoto Protocol??
III. Understanding Health Care & Environmental Policy pg. 610
 A. Democracy and Health Care and Environmental Policy
 B. The Scope of Government and Health Care and
Environmental Policy
Sources of Energy in the US
Renewable
6%
Other
5%
Nuclear
8%
Coal
22%
Petroleum
37%
Natural gas
22%